The Department of Premier and Cabinet, in conjunction with the Department of Commerce, has established the Prequalification Scheme: Performance and Management Services – a list of prequalified service providers to assist NSW Government agencies and statutory corporations to engage the best external expertise in the following areas:

1. Performance Reviews – including reviews of agencies, programs, budgetary and performance targets, management, functions, policies and strategies, and legislation and regulation
2. Infrastructure and Major Projects – advice and/or assistance regarding strategy and planning, risk, major project procurement and delivery, contracting, communication and project management
3. Service Delivery Improvement – advice and/or assistance regarding service strategy and planning, service implementation, service performance and service evaluation
4. Organisational Capacity – advice and/or assistance regarding governance and reporting, corporate and business strategy, business process improvement, communication, human resources, financial management, asset management and procurement and office services
5. General Technical Expertise – advice and/or assistance regarding policy development, business case development, contracts and contracting, project governance and management, issues management, financial and economic analysis, budget management and environmental impact assessment

The Scheme will operate for an initial two year period. The Scheme is open and applications for inclusion will be assessed at regular intervals.

What are the benefits of the Scheme to NSW Government agencies?

The Scheme aims to improve agency procurement and use of performance and management services by providing:

1. streamlined competitive tendering processes with high probity standards;
2. fee rates that represent value for money; and
3. quality assurance.

How will the Scheme operate?

A list of service providers will be maintained by the NSW Department of Commerce and made available to agencies and statutory corporations.  Service providers will have expertise in one or more of the five areas covered by the Scheme: Performance Reviews; Infrastructure and Major Projects; Service Delivery Improvement; Organisational Capacity; and General Technical Expertise.
While these types of services are typically provided as ‘consultancy’, the Scheme can be used by agencies regardless of whether service providers are engaged as ‘consultants’ or as ‘contractors’.

is a person or organisation engaged under contract on a temporary basis to provide recommendations or high-level specialist or professional advice to assist decision-making by management. Generally, it is the advisory nature of the work that differentiates a consultant from a contractor. 

Different reporting obligations apply depending on whether service providers are engaged as consultants or contractors. Further guidance on agencies’ reporting obligations is set out in the Scheme’s Guidelines for Agencies.

The Department of Commerce website will provide information about the Scheme. The service providers who have been admitted to the Scheme will not be identified on the website, but agencies can use an online enquiry form to request detailed information about service providers. Commerce will send information to ‘nsw.gov.au’ e-mail addresses and to statutory corporations. Scheme guidelines for agencies and service providers and an online enquiry form will be available at the NSW Procurement Prequalification website. Phone and online enquiries can be made to NSW Procurement Support Ph: 1800 679 289 or e-mail: [email protected]

How will the Scheme streamline competitive tendering processes?

Under the Scheme, the following minimum levels of competition will apply:

1. Where the estimated cost of a project is less than or equal to $150,000, an engagement can be made directly from the Scheme by inviting one (1) written quotation from a service provider prequalified under the Scheme.
2. Where the estimated cost of a project is more than $150,000, an engagement can be made from the Scheme by inviting a minimum of three (3) service providers, prequalified under the Scheme, to submit proposals. Open invitations to tender are not required.

Can an already engaged service provider be offered further engagements?

A service provider’s engagement may result in the need for related ‘flow-on’ work.  If possible, agencies should anticipate the potential for further engagements and give notice to service providers when they are first invited to submit a proposal.

Whether advance notice is possible or not, a service provider who has undertaken an initial engagement may be invited by the agency to submit a proposal for further services provided the following criteria are satisfied:

1. Satisfactory performance
2. Demonstrated knowledge and expertise developed during the first engagement
3. Value for money for additional related engagements

The total value of the first and related flow-on engagements is not to exceed the lesser of three times the value of the first engagement or $500,000. Where flow-on engagements are likely to exceed the applicable limit, a minimum of three service providers from the Scheme should be invited to provide proposals unless exceptional circumstances can be demonstrated.

Note: Successive consultancy engagements constitute a form of direct negotiation between an agency and a prequalified service provider. For guidance, agencies should refer to the Independent Commission Against Corruption publication, Direct Negotiations: Guidelines for managing risks in direct negotiations, May 2006. 

How will the scheme improve use of and satisfaction with performance and management services?

Quality assurance, value for money and performance improvement are key objectives of the Scheme.

To assist in meeting these objectives, the Department of Commerce will collect the following information from agencies for each engagement:

1. the name of the service provider
2. the total value of the engagement
3. any variations or flow-on engagements
4. a brief description of the outcome

Where a prequalified service provider’s performance has been considered unsatisfactory, agencies will be required to complete a performance report in the prescribed form. A performance report will also be required where the total cost of the engagement and any related flow-on engagements is $150,000 or more.

For the purposes of monitoring and reporting on the performance of service providers, agencies are to liaise with the service provider and attempt to reach an agreement on the rating of each performance criterion in a manner which reflects the service provider’s actual performance on the project. Further details about the reporting requirements are set out in the Scheme Conditions and the Guidelines for Agencies. The Department of Commerce will provide an online reporting service.

These reporting obligations apply in addition to agencies’ other reporting and disclosure obligations under the Freedom of Information Act 1989s Memorandum M2007-01 and NSW annual reporting legislation.

What are the obligations and responsibilities of agencies in accessing the Scheme?

Agencies using the Scheme are responsible for making their own assessment of a service provider’s suitability for a particular engagement and to undertake appropriate due diligence checks according to the size of the engagement, the risks involved and the required value for money in any engagement.

Admission to the Scheme is not a guarantee of work and no agency of the NSW Government is obliged to provide any work opportunities to any service provider who is prequalified under the Scheme.

What does the Scheme not cover?

The Scheme will not cover areas of procurement already addressed by other prequalification schemes or panel contracts, including:

1. State Contracts Control Board (period) contracts
2. Construction-related consultant prequalification schemes
3. Information and Communication Technology (ICT) Capital Investment Process - Consultant Prequalification Scheme

A detailed list of panels and schemes (as at September, 2008) is included as an attachment to the Guidelines for Agencies and Applicants.

Further information

The following documents are provided for guidance to agencies and applicants in accessing and using the Scheme:

1. Guidelines for Agencies (including other panel contracts and prequalification schemes)
2. Guidelines for Applicants (including other panel contracts and prequalification schemes)
3. Scheme Conditions (including the Application Form at Schedule 1 and Standard Form of  Agreement at Schedule 2)

Scheme documents may be accessed at the NSW Procurement Prequalification website.

Robyn Kruk
Director General